Iraq Cuts July Crude for Term Buyers

Reuters, citing industry sources, reports that Iraq will supply crude to term buyers at an average of 10 to 15 per cent below contract volumes for July, largely steady, with a cut of around 10 per cent for June.

The cut was on medium-heavy Basra Light crude, they said. State Oil Marketing Organisation (Somo) did not say why it cut supplies, but exports from Basra can fluctuate widely due to weather conditions or technical problems, while repeated bomb attacks have hampered crude flow from Kirkuk fields in recent months.

Iraq’s oil exports rose in May to 1.9 million barrels per day (bpd) from 1.767 million bpd the month before, recovering from a dip in April caused by bad weather and a bomb attack, Somo Head Falah Alamri said earlier this month.

Iraq exported an average of 1.460 million barrels per day from the southern oil hub of Basra and 440,000 barrels per day from the northern oilfields around Kirkuk, including 10,000 barrels per day by trucks to Jordan last month.

Alamri said he expected oil exports to rise over the coming months in excess of 1.9 million bpd.

Last month, Iraq cut crude supply by around 10 per cent to Asian term buyers for June, which may have been related to unstable production.

Demand for Basra Light improved slightly over the past two months from the first quarter of this year.

Iraq cut the official selling price of its Basra Light loading in July to Asian customers to a discount of $1.10 a barrel to the average of Oman/Dubai quotes, down 5 cents from June.

The Opec member has signed deals with global oil companies that could help boost its output capacity to 12 million barrels per day in six to seven years’ time from the current 2.5 million barrels per day.